flexibility in terms of testing centres, dates and timing and provides easy accessibility and

convenience to candidates as he can be tested at any time and from any location. It tests
practical knowledge and skills, that are required to operate in financial markets, in a very
secure and unbiased manner, and certifies personnel who have a proper understanding of the
market and business and skills to service different constituents of the market.

The above reforms have come in stages. As some deficiency is noted or some malpractice
surfaces in the working of the market, the authorities initiate further reforms and corrective
steps. As such, the process of reform in the securities market is far from complete. At the
same time the reforms undertaken so far have aimed to improve operational and informational
efficiency in the market by enabling the participants to carry out transactions in a cost
effective manner and providing them with full, relevant and accurate information in time.
A number of checks and balances have been built up to protect investors, enhance their
confidence and avoid systemic failure of the market. Stability of the system as a whole has
been protected by allowing for contestability of the market and imposing entry criteria for
issuers and intermediaries. Financial integrity of the market is ensured by prudential controls
on intermediaries.

1.6 ROLE OF NSE IN INDIAN SECURITIES MARKET

National Stock Exchange of India Limited (NSE) was given recognition as a stock exchange
in April 1993. NSE was set up with the objectives of (a) establishing a nationwide trading
facility for all types of securities, (b) ensuring equal access to all investors all over the country
through an appropriate communication network, (c) providing a fair, efficient and transparent
securities market using electronic trading system, (d) enabling shorter settlement cycles and
book entry settlements, and (e) meeting the international benchmarks and standards. Within
a short span of life, above objectives have been realized and the Exchange has played a leading
role as a change agent in transforming the Indian Capital Markets to its present form.

NSE has set up infrastructure that serves as a role model for the securities industry in terms of
trading systems, clearing and settlement practices and procedures. The standards set by NSE
in terms of market practices, products, technology and service standards have become industry
benchmarks and are being replicated by other market participants. It provides screen-based
automated trading system with a high degree of transparency and equal access to investors
irrespective of geographical location. The high level of information dissemination through on-
line system has helped in integrating retail investors on a nation-wide basis. The Exchange
currently operates three market segments, namely Capital Market Segment, Wholesale Debt
Market Segment and Futures an Options segment. NSE has been playing the role of a catalytic
agent in reforming the market in terms of microstructure and market practices. Right from
its inception, the exchange has adopted the purest form of demutualised set up whereby the
ownership, management and trading rights are in the hands of three different sets of people.
This has completely eliminated any conflict of interest and helped NSE to aggressively pursue
policies and practices within a public interest framework. It has helped in shifting the trading
platform from the trading hall in the premises of the exchange to the computer terminals at
the premises of the trading members located country-wide and subsequently to the personal

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